The manufacturers of the textile sector of the country fear a hindrance in the production and export due to a shortage of raw materials as commercial banks are unwill to open new letters of credit (LC).
According to the media reports, textiles and readymade garment manufacturers said that they were facing trouble in opening LCs which will be settled by Export Development Fund and Usance Paid at Sight LC or deferred LC in most of the banks in recent time.
The media reports claimed citing them that their stock of raw materials for four to five months was needed for ensuring smooth production and exports but with the current stock the textile sector could continue its production for two to three months as banks were not opening LCs showing dollar crisis as an excuse.
The Bangladesh Textile Mills Association on Sunday sent a letter to the Bangladesh Bank seeking its direction for the commercial banks to open deferred LCs and LCs to be settled by the EDF finance.
The letter signed by BTMA president Mohammad Ali Khokon said it was alarming that most of the commercial banks had been showing reluctance in opening LCs for importing cotton, polyester staple fibre, and viscose staple fibre.
If they cannot import the required raw materials, it would not be possible to deliver the already received orders of apparel items.
The letter also read that if the situation continued, production of yarns in many of the country’s spinning mills would be hampered due to a shortage of raw materials.
Moreover, less production of yarns would interrupt the value chain, and exports of readymade garments will be affected severely which will accelerate the existing dollar crisis, the letter said.
Speaking to the media, manufacturers said that a number of the exporters have been facing difficulties in opening LCs for importing raw materials. Due to a shortage of raw materials, RMG exporters have been missing export deadlines.